How a debt reunification works


Payday loan consolidation consists in grouping all the loans and mortgages that we have contracted in a single loan. In this way, we will only face the payment of a single monthly fee whose amount will be less than the sum of the various installments that we had to deal with previously. That is, they meet debts to considerably reduce what we pay each month, at the expense of increasing the repayment period and, therefore, the final cost of the operation due to the interests.

This way of dealing with the payment of our debts can be managed by specialized companies, called mediators, which allow us to unify loans and mortgages that we have with different banks or with different types of interest. The debts can also be reunited through a bank with which we have the majority of loans or pending mortgages. Now, let’s take a look at the reunification process, the expenses, advantages, disadvantages and requirements.

How to spend paying several monthly installments to one

How to spend paying several monthly installments to one

The path to the reunification of our debts is not particularly complicated, although it does require the study of our case by the mediating company. The mediator will analyze our debts, the interests that we are paying and the repayment terms that we have before us, once the operation has been approved, to start negotiating with the banking entities the new payment conditions.

When the process is underway, all our loans and mortgages will be canceled to reunify them in a single mortgage with the new conditions previously negotiated. This new mortgage will add the total of our outstanding debts and will have both a new interest rate and a new repayment period, usually longer to reduce the monthly fee that we will have to pay.

What expenses entails the reunification of debts

Joining our debts into one alone implies a series of expenses that should be taken into account, beyond the cost of interests that we mentioned above.

  • Because reunification implies the early cancellation of all our loans, the most common is that we have to pay the usual commissions for early cancellation or repayment.
  • On the other hand, in order to join our debts we have to formalize the opening of a new mortgage, with all the associated expenses that this entails, such as the commission for the opening of the mortgage, the costs of appraisal of the property or property mortgaged, the tax of documented legal acts or the fees of the notary.
  • Finally, if it is decided to manage reunification through a mediating agency , it will charge its own fees; On the other hand, in case of reuniting debts through our bank, they do not usually charge commissions for the reunification operation.

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What requirements are requested to reunite debts

What requirements are requested to reunite debts

There are several conditions so we can access the reunification of our debts. The first is that we can not choose to unify debts and not others: we have to group each and every one of the loans that we have in the same mortgage.

In this way, the second most common requirement is that the amount of this new mortgage does not exceed 80% of the value of the mortgaged property. This offers an additional guarantee to the entity with which we have debts, although usually we also ask for the usual requirements that apply to the granting of any mortgage: stable and demonstrable monthly income, not included in a list of defaulters and Present a guarantor that responds to us.

Although reuniting debts will very much alleviate the monthly cost of our loans, it will also increase in the long run. Therefore, we should carefully analyze all the costs that we will face during the reunification process as well as the final expense that will result in the payment of our loans being extended.